3G auctions weren't 'economic activity'

In a surreal end to an epic struggle between the mobile operators and the EU, the European Court of Justice has ruled that "the award by the State of 3G mobile telecommunications licences by auction does not constitute an economic activity".To recap, the operators all shelled out billions of pounds on their 3G licences, but didn't really have the business case (or decent handsets) to recoup that money for a good few years afterwards.

In a surreal end to an epic struggle between the mobile operators and the EU, the European Court of Justice has ruled that "the award by the State of 3G mobile telecommunications licences by auction does not constitute an economic activity".

To recap, the operators all shelled out billions of pounds on their 3G licences, but didn't really have the business case (or decent handsets) to recoup that money for a good few years afterwards. Understandably, they then tried to claim back some of that money from the Treasury. Their argument went vaguely along the lines of: "Hang on, surely some of the money we payed was VAT? We should have that back. Please."

Last year they were definitively told to get lost, but yesterday's ruling by the ECJ must feel like salt being rubbed in the wound. I'm not usually one to feel sorry for mobile operators, but it must be somewhat galling to be told that a multi-billion-pound auction "does not constitute an economic activity"!

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